Lee Bok-hyun, Financial Supervisory Service Chief, Indicates "Delisting of Substandard Listed Companies"

Mention of Value-up 'Penalty'
Contradicts Financial Services Commission's 'Voluntary Recommendation'

Lee Bok-hyun, Governor of the Financial Supervisory Service, is attending a meeting of research institute heads held on the 28th at the Kensington Hotel in Yeouido, Yeongdeungpo-gu, Seoul. Photo by Jo Yong-jun jun21@

Lee Bok-hyun, Governor of the Financial Supervisory Service, stated, "We are considering measures to actively delist listed companies from the securities market if they fail to meet certain standards such as shareholder returns." This statement contrasts with the Financial Services Commission's announcement three days ago that the 'Corporate Value-Up Program' lacks penalty provisions.

On the 28th, after the '2024 Financial Industry Trend Meeting' held at the Kensington Hotel in Yeouido, Seoul, Governor Lee told reporters, "We are reviewing various options, including creating specific corporate-related indicators such as shareholder returns and delisting companies that do not meet these criteria."

The reason Governor Lee made remarks that differ from the government's plan is interpreted as a response to criticisms regarding the program's effectiveness after its announcement. On the 26th, under the chairmanship of Deputy Prime Minister for Economy Choi Sang-mok, the government, including the Emergency Economic Ministers' Meeting, the Financial Services Commission, and the Korea Exchange, made a concerted effort to promote the Corporate Value-Up Program, but it was widely evaluated as falling short of expectations due to the lack of enforceability.

Governor Lee revealed a policy stance that long-term low growth and poor shareholder returns could be considered key indicators for market delisting. He said, "If deteriorations continue in the stock market, it becomes difficult to properly evaluate excellent companies," adding, "We need to allow deteriorating companies to exit the market in a timely manner so that funds can flow to companies with growth potential."

He further added, "I question whether it is appropriate to keep companies in the market for a long time that show no significant growth, have poor financial indicators, or are used as tools for mergers and acquisitions (M&A)."

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